Energy policy

Energy policy is the manner in which a given entity (often governmental) has decided to address issues of energy development including energy conversion, distribution and use as well as reduction of greenhouse gas emissions in order to contribute to climate change mitigation. The attributes of energy policy may include legislation, international treaties, incentives to investment, guidelines for energy conservation, taxation and other public policy techniques. Energy is a core component of modern economies. A functioning economy requires not only labor and capital but also energy, for manufacturing processes, transportation, communication, agriculture, and more. Energy planning is more detailed than energy policy.
Energy policy is closely related to climate change policy because totalled worldwide the energy sector emits more greenhouse gas than other sectors.
Purposes
Access to energy is critical for basic social needs, such as lighting, heating, cooking, and healthcare. Given the importance of energy, the price of energy has a direct effect on jobs, economic productivity, business competitiveness, and the cost of goods and services.
Frequently the dominant issue of energy policy is the risk of supply-demand mismatch (see: energy crisis). Current energy policies also address environmental issues (see: climate change), particularly challenging because of the need to reconcile global objectives and international rules with domestic needs and laws.
The "human dimensions" of energy use are of increasing interest to business, utilities, and policymakers. Using the social sciences to gain insights into energy consumer behavior can help policymakers to make better decisions about broad-based climate and energy options. This could facilitate more efficient energy use, renewable-energy commercialization, and carbon-emission reductions.
Approaches
The attributes of energy policy may include legislation, international treaties, incentives to investment, guidelines for energy conservation, taxation and other public policy techniques. Economic and energy modelling can be used by governmental or inter-governmental bodies as an advisory and analysis tool.
National energy policy
Some governments state an explicit energy policy. Others do not but in any case, each government practices some type of energy policy. A national energy policy comprises a set of measures involving that country's laws, treaties and agency directives. The energy policy of a sovereign nation may include one or more of the following measures:
statement of national policy regarding energy planning, energy generation, transmission and usage
legislation on commercial energy activities (trading, transport, storage, etc.)
legislation affecting energy use, such as efficiency standards, emission standards
instructions for state-owned energy sector assets and organizations
active participation in, co-ordination of and incentives for mineral fuels exploration (see geological survey) and other energy-related research and development policy command
fiscal policies related to energy products and services (taxes, exemptions, subsidies, etc.)
energy security and international policy measures such as:
international energy sector treaties and alliances,
general international trade agreements,
special relations with energy-rich countries, including military presence and/or domination.
There are a number of elements that are naturally contained in a national energy policy, regardless of which of the above measures was used to arrive at the resultant policy. The chief elements intrinsic to an energy policy are:
What is the extent of energy self-sufficiency for this nation
Where future energy sources will derive
How future energy will be consumed (e.g. among sectors)
What fraction of the population will be acceptable to endure energy poverty
What are the goals for future energy intensity, ratio of energy consumed to GDP
What is the reliability standard for distribution reliability
What environmental externalities are acceptable and are forecast
What form of "portable energy" is forecast (e.g. sources of fuel for motor vehicles)
How will energy efficient hardware (e.g. hybrid vehicles, household appliances) be encouraged
How can the national policy drive province, state and municipal functions
What specific mechanisms (e.g. taxes, incentives, manufacturing standards) are in place to implement the total policy
Do you want to develop and promote a plan for how to get the world to zero CO2 emissions?
What future consequences there will be for national security and foreign policy
Relationship to other government policies
Energy policy sometimes dominates and sometimes is dominated by other government policies. For example energy policy may dominate, supplying free coal to poor families and schools thus supporting social policy, but thus causing air pollution and so impeding heath policy and environmental policy. On the other hand energy policy may be dominated by defense policy, for example some counties started building expensive nuclear power plants to supply material for bombs. Or defense policy may be dominated for a while, eventually resulting in stranded assets, such as Nord Stream 2.
Energy policy is closely related to climate change policy because totalled worldwide the energy sector emits more greenhouse gas than other sectors.
Energy policy decisions are sometimes not taken democratically.
Corporate energy policy
In 2019, some companies “have committed to set climate targets across their operations and value chains aligned with limiting global temperature rise to 1.5°C above pre-industrial levels and reaching net-zero emissions by no later than 2050”. Corporate power purchase agreements can kickstart renewable energy projects, but the energy policies of some countries do not allow or discourage them.
By type of energy
Nuclear energy
Renewable energy
By country
Energy policies vary by country, see tables below.
Examples
China
India
Ecuador
European Union
Russia
United Kingdom
United States
See also
Energy balance
Energy industry
Energy law
Energy security
Environmental policy
Oil Shockwave
Sustainable energy
World Forum on Energy Regulation (WFER)
References
External links
"Energy Policies of (Country x)" series, International Energy Agency
UN-Energy - Global energy policy co-ordination
Renewable Energy Policy Network (REN21)
Information on energy institutions, policies and local energy companies by country, Enerdata Publications
Energy economics
Environmental social science
Power control
Climate change policy
Policy
Public policy